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Ruling to cost APC $389K

Posted: Thursday, January 18, 2001

By DOUG LOSHBAUGHPeninsula Clarion

A former Kenai resident has won a $389,000 verdict against Alaska Petroleum Contractors.

Attorney Eric Derleth said APC illegally fired his client, Dan Reust, in retaliation for his role in the case of a different employee who sued APC. On Jan. 11, a Kenai Superior Court jury awarded Reust $100,000 for emotional distress, $132,200 for lost wages from the date he was fired until the trial and $156,800 for wages he might have received for the next seven years -- a total of $389,000.

"The sum, with interest and attorney's fees, is nearly $500,000," Derleth said. "We go back for punitive damages March 5."

However, Sean Halloran, attorney for APC, said Superior Court Judge Jonathan Link has yet to rule on several motions which, if granted, could force him to take parts of the case back from the jury -- even parts the jury already has decided. If APC loses before Link, it will appeal, he said.

"There are a lot of issues that will have to go to the Alaska Supreme Court, because (the Superior Court) has decided to create new areas of law that the Supreme Court has already rejected on several occasions," he said. "The Supreme Court has already said that retaliatory firing is a contract claim, but this court allowed it to be tried as a tort claim."

Under a contract claim, he said, there would be no basis for punitive damages or awards for emotional distress or loss of future wages. But setting that aside, Halloran said, he cannot understand the recent verdict.

"There is no basis in fact or in the law for the jury having done what it did," he said.

According to Derleth, the history of the case dates to 1995, when Reust worked for APC at Milne Point on the North Slope. At the time, he said, APC dismissed a different employee after drug tests found traces of marijuana in his urine. However, managers told him he could have his job back if he competed a treatment program.

He did, and Reust tried to hire him back, Derleth said. But Chris Boyle, director of human resources for APC parent company Natchiq Inc., nixed the hire. The man sued, Derleth said, and Reust's deposition forced APC to settle out of court. In his deposition, Derleth said, Reust said APC had promised the man his job back if he completed treatment.

"Boyle said APC was winding down and there wasn't a job," Derleth said. "Reust said, 'There was a job. We held it open for (the other man) and it went to someone else.'"

Reust left APC and moved to Oregon, Derleth said, but in 1998, Todd Pizzuto, APC's Nikiski manager, asked him if he would consider a job as second-in-command in Nikiski. Reust interviewed. Derleth said Pizzuto offered him the job and gave him a hiring packet, which Reust completed and returned.

Derleth said Pizzuto told Reust to report for work the next day, but later left a message that the Anchorage office had problems with his resume.

According to Derleth, Pizzuto finally told Reust that Boyle said he was unqualified for the job, had been bad-mouthing the company and had picked a fight in a bar with Gary Buchanan, a previous manager of the Nikiski yard who since had been promoted.

"Before Dan came to be told all this, Pizzuto, (Mike Bailey of APC) and Boyle had a teleconference. The topic was the (previous) lawsuit," Derleth said. "The end result of the teleconference was that Boyle said they wouldn't consider him for further employment. They say that's when the decision was made not to hire him. We say that's when the decision was made to fire him."

When Reust's lawsuit went to trial, Buchanan testified that he did not know Reust and had never heard him bad-mouth the company or had a fight with him, Derleth said.

"Buchanan said the only thing he knew about Reust was that someone told him five or six years ago, when Reust was at Milne Point, that Reust was thinking of suing APC," Derleth said. "The only person he remembered talking to about that was Chris Boyle."

Pizzuto testified that he never gave Reust the hiring packet, Derleth said. However, Gary Peikert, whom Reust was to replace, remembered seeing Reust return the packet, and Reust had the employee's copy of a health insurance application from the packet. Derleth said Peikert testified that Pizzuto had told him, too, that Reust's involvement in the previous lawsuit was the reason he could not be hired.

However, APC attorney Halloran said no one at APC ever saw Reust's deposition in the previous case or knew what it contained. Only lawyers in the case ever read it, he said. He said APC settled the previous case because once management realized the man had been promised his job, the right thing was to pay him his damages. There were no jobs available after he finished his treatment, Halloran said.

He said Peikert recommended Reust to Pizzuto and Pizzuto recommended him to Bailey, who rejected Reust based on rumors he had bad-mouthed the company. It was Peikert, not Pizzuto, who gave Reust the hiring packet, Halloran said, and Reust never competed it.

"He was never offered a job. They never discussed things like salary. He acknowledged that under oath," Halloran said. "How the jury could have thought otherwise is beyond me."